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The 1920s American Real Estate Boom and the Downturn of the Great Depression: Evidence from City Cross-Sections

In: Housing and Mortgage Markets in Historical Perspective

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Author Info

  • Michael Brocker
  • Christopher Hanes

Abstract

In the 1929-1933 downturn of the Great Depression, house values and homeownership rates fell more, and mortgage foreclosure rates were higher, in cities that had experienced relatively high rates of house construction in the residential real-estate boom of the mid-1920s. Across the 1920s, boom cities had seen the biggest increases in house values and homeownership rates. These patterns suggest that the mid-1920s boom contributed to the depth of the Great Depression through wealth and financial effects of falling house values. Also, they are very similar to cross-sectional patterns across metro areas around 2006.

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This chapter was published in:

  • Eugene N. White & Kenneth Snowden & Price Fishback, 2014. "Housing and Mortgage Markets in Historical Perspective," NBER Books, National Bureau of Economic Research, Inc, number fish12-2, octubre-d.
    This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 12798.

    Handle: RePEc:nbr:nberch:12798

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    1. Stijn Van Nieuwerburgh & Pierre-Olivier Weill, 2010. "Why Has House Price Dispersion Gone Up?," Review of Economic Studies, Oxford University Press, vol. 77(4), pages 1567-1606.
    2. Eugene N. White, 2006. "Bubbles and Busts: The 1990s in the Mirror of the 1920s," NBER Working Papers 12138, National Bureau of Economic Research, Inc.
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    Cited by:
    1. Price V. Fishback & Trevor Kollmann, 2012. "New Multi-City Estimates of the Changes in Home Values, 1920-1940," NBER Working Papers 18272, National Bureau of Economic Research, Inc.

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